Standing Up for the Little Guy

7/23/2012 12:01 AM Eastern

By: Mark Robichaux

American Cable Association CEO Matt Polka is like a blur in Washingtonthese days — racing from committee hearing to meeting withlegislators or counseling members. The cable-TV industry iscompetitive enough if you’re one of the top five giants, likeComcast or Time Warner Cable. But for the nation’s independentoperators — literally a dying breed — it’s a struggle forsurvival. The ACA represents roughly 900 cable operators,82% of which have 5,000 subscribers or fewer. Its smallest membersnumber less than 100 subscribers. Polka, who joined ACA as a volunteerin 1993 and was named its president and CEO in 2000, carved outtime to discuss its biggest challenges with Multichannel News editor inchief Mark Robichaux, as the group this week kicks off The IndependentShow, the annual convention it co-hosts with the National Cable TelevisionCo-operative in Orlando, Fla. An edited transcript follows.

MCN: Do you feel like the ACA and the NCTC arehaving an impact in Washington on retransmissionconsentnegotiations with broadcasters?

MP: We do see significant discussion by the keypolicy-makers, the lawmakers that have the gaveland then the key members of the appropriate committees.And, virtually unanimously, they’re sayingthere needs to be review and reform and rewrite.

They all — from Ed Markey to Joe Barton and fromJay Rockefeller to Jim DeMint — have said the rulesand regulations that govern video today are old andoutdated and need to be updated for today’s marketbecause the market has changed so significantly.

MCN: You’re talking about a larger rewrite oftelecom law?

MP: Absolutely. So that includes broadcast-carriageregulation, that includes other programming issues.

So it is a very broad statement and we’re verypleased about that because the broadcastersfor years have benefitted from the fact that theCable Act and the ’96 Communications Act don’thave any built-in reviews, like the Satellite HomeViewer Act — Congress has to review that lawevery four or five years and renew it, or else itsunsets. And that doesn’t happen in cable/videolaws and regulations.

The marketplace has changed significantlysince 1992 and the current laws and regulationshave just simply not kept up for thebenefit of either providers or consumers.

MCN: What do you thinkthe chances are that something’sgoing to get rewrittenin an election year or next year even?

MP: Well, let’s put it this way: I think no matterwho you talk to I think you need to find consensushere. 2012 is a year, I think, where the committeeshave said, “Yes, you know what, we haveto do something about this.”

The process for that rewrite, whatever thatmay be, I think will begin in 2013 and there is noguarantee of how long that takes.

MP: We always suffer big vs. small There’s apublic-policy interest in wanting to help smallercompanies because it benefits our ability to provideadvance services in smaller markets.

MCN: What specifically are you asking forin the way of restransmission consent andcoordinated negotiations with broadcasters?

MP: We brought this issue to the FCC and we’vetaken it to the Hill as well. Actually, I think the FCChas a opportunity to do something about it this year.

We have alleged that it is harmful to consumersand really a violation of the FCC’s good faithrules for multiple broadcasters in a marketplace,two or more, to jointly negotiate retransmissionconsent for all of their stations, even thoughthey are not commonly owned.

We’ve shown that where one station controlsthe negotiation for two or more of the big fournetworks, that they can significantly and artificiallyand harmfully to consumers increase the ratesthat they demand because they control more thanone what we call “must have” channels.

And we think that that’s a violation of the goodfaithrules. We’ve asked the FCC to prohibit that.And in our efforts going forward with Congress, wewould ask Congress to prohibit that as well.

MCN: What can the ACA ask Congress to doabout sports costs?

MP: I think the most practical thing that can occurright now is for lawmakers to call those responsibleto the table and ask them what the heck is going on.Why are consumers required to pay for all of this programming,particularly sports, which has been demonstratedto be the highest cost to consumers, andnot have any choice about it whatsoever? Why am Ipaying for all this when I might be a casual observer?

It actually gives us a great entrée into the whole issue of bundling, becauseit’s not just sports bundling,but it’s also othercable bundling.

MCN: Are you pushingfor a la carte though?

MP: No, we’re not advocatingfor that. We haven’t suggested anythinghere today or as it goes forward other than scrutinyand transparency. That has to be the first stepin what I think will be a longer-term process.

MCN Are your members technologically preparedfor the next five years?

MP: For the smaller providers, the technologytrickles down, so to speak, and how things getrolled out with the larger companies and then thatbecomes more available for the smaller operator astime goes and scalability occurs.

People expect broadband and that’s going to becentral. So if you look at systems that have a futureand systems that are gonna have a hard time,broadband I think is going to be the defining factor.

MCN: What are you asking for on emergency alert?

MP: Emergency alert underscores why our associationessentially exists as an independentvoice for smaller and rural providers, independentproviders. Cost of technology, the cost ofwhat are mandates of regulation, which has, asalways, a much greater, disproportionate impactand cost on our members because we have fewersubscribers per mile than the larger companies.

Our issue there has been as always one of costof compliance and encouraging and urging theFCC to be flexible and sympathetic to our membersthat file what are legitimate hardship waiverrequests until such time as internet becomesmuch more ubiquitous in remote areas.

MCN: If Aereo, which provides over-the-air TVsignals via broadband to mobile devices, ultimatelywins in court, what would the repercussions be forthe cable TV industry and retransmission consent?

MP: I don’t see it as a bad thing. I think that technologicalinnovation is good. It’s gonna happen.We in industry have to get with the program andunderstand that we need to be as involved in technologicalinnovation as those companies that maybe perceived to be potential competitors.

For all I know at this point, you know, a companylike Aereo or others may be a partner of ourmembers in years to come, where our memberscan partner with a company like Aereo for the deliveryof free over-the-air broadcast signals, whichis what Congress intended to begin with, and stillremind broadcasters that’s your obligation.

You weren’t given a God-given right to extractretransmission consent from consumers, butrather you were told that you have to providefree over-the-air signals to all consumers,because that’s why you got the spectrum fornothing. That’s the deal.

And so, if through technological innovationwe can provide those services to our customersfor free as intended by Congress, then yeah,I think that will change the retransmissionconsentdynamic and it darn well should.